Bank on Synovus

"We are contrarians and the stocks we
like are almost always out of favor," notes Kelley Wright,
editor of IQ Trends. "To be frank, I’d be
disturbed to find that our stocks are in favor because from a contrarian
perspective that would mean we are wrong." Here’s his latest.

"We buy select stocks that
qualify as blue chips when they are trading at historically undervalued levels, hold
them through their rising trends, and sell when they reach their
historically overvalued prices. We identify these over and under valued levels
through proprietary dividend yield profiles which are based on repetitive
extremes seen in each stock’s long-term history. We have followed this approach
without deviation since our inception in 1966.

"Synovus Financial (SNV
NYSE) is best known as the parent company to
its 40 banking subsidiaries. The company has earned the distinction of an A+
dividend and earnings rank from Standard and Poors. Besides its banking
operations, the company also owns a 81.1% ownership stake in payment process
Total Systems Services (TSYS).
In its novel approach,
SNV allows each affiliated bank to maintain its own brands,
management, and charter. This decentralized model is created around the theory
that local branches know their customers best. Though over 60% of its
financial service revenues come from Georgia, SNV also has significant
operations in Alabama, South Carolina, and Florida.
The firm is also one of the world’s
largest electronic payment processors. Major customers include 5 of
the 10 largest credit card issuing banks in the
world.

"The close of the fourth quarter proved
profitable for Synovus. The company announced a 16% gain on net interest income.
Profit for the quarter rose to $0.38 per share from $0.34 during the same period
in 2003. Overall results for 2004 showed net income at $1.41/share from
$1.28/share during the previous year. In 2005 the company expects earnings to
fall in the range of $1.58 per share to $1.62. Coinciding with the increases
came an announcement in late February that SNV was raising its quarterly
dividend by 5.3% to $0.1825 a share.

"The shares are
in a ‘Rising Trend’ with a downside risk to an historical ‘Undervalue’ price of
$24, where the stock would provide a high yield of 3.0%. From current levels,
the shares have upside potential of over 117% to an Overvalue price of $61,
where the shares would have an historically low yield of 1.2%. Based on its
strong record of dividend increase, elevated yield level, and A+ quality
ranking, shares of SNV offer an attractive possibility for those not already
invested in the banking sector. Though it has a market capitalization of almost
$9 billion, the bank’s unique operating structure allows it the flexibility of a
much smaller entity. Technically, the shares are in the Undervalue category at
prices of $27 and lower."